Confused about conventional versus DSCR

[Michelle Chevalier]

I am trying to purchase a second SFH investment property. I have one SFH rental that I purchased in 2021 using FHA (it was my primary residence at the time). I am trying to get a conventional loan this time around for the second rental property. My front end DTI is 26% and my back end would be 39% with the second mortgage. my credit score is around 710-760 depending on the reporting agency. I make $131k, including the rental income. Budget is $200,000 and I plan to put down 20% that is a gift from my mother.

I talked to a mortgage broker with Edge Home Finance and submitted an application for pre-approval. The broker told me that he couldn't make a conventional work because I'd have to purchase 4 points and that would be outside of compliant pricing. He recommended a DSCR loan instead but the fees seem high ($55,500 to close). I haven't seen a fee breakdown yet but something feels off here. Would the 39% DTI really disqualify me for the conventional loan?

[Robin Simon]

Do you have a breakdown of the fees? Something is definitely seemingly off on this - $55,500 is indeed way too high for a DSCR Loan unless I'm missing something